The bonds will be issued across multiple maturities, with tenures ranging from 24 months to 60 months. These instruments are likely to yield anything between 8.7% and 9.1%, people aware of the pricing plans and the fundraising said. The bonds have been rated “AA (stable)” by Crisil Ratings and “AA+ (Stable)” by Brickwork Ratings.
This is the first public bond sale by the lender this fiscal.
“Our business is going well backed by good credit demand. So, it’s a good time to raise capital and boost liquidity,” IIFL Finance managing director Nirmal Jain told ET. “Investors also look for fixed income options,” he said.
The Fairfax-backed company saw its standalone assets under management more than double year-on-year to Rs 49,000 crore, while gold loans accounted for about 90% of the advances. The gold loan business nearly tripled in a year.
“The retail bond will help diversify our funding source,” Jain said.
It has an outstanding borrowing of close to Rs 34,000 crore with bank loans accounting for about 35%, while debentures account for about 25%, an official said. Within debentures, the share of retail bonds is 7%. The balance 40% is divided between securitization and other sources (29%) and overseas borrowing (11%).Proceeds from the fundraise will be utilised for onward lending, refinancing of existing borrowings and general corporate purposes, in line with regulatory guidelines.
Besides gold loans, IIFL Finance provides loans to small businesses, classified as micro small and medium enterprises. .
The IIFL group has exposure in the home loan market and microfinance through its subsidiaries called IIFL Home Finance and IIFL Samasta Finance. Their combined assets under management stood at Rs 98336 crore.
IIFL Home Finance, which is 80% owned by IIFL Finance has Rs 39628 crore AUM. The balance Rs 9681 crore was of the wholly-owned microfinance subsidiary. Overall the group caters to 4.6 million customers. IIFL Finance is publicly listed while its subsidiaries are not.
